Irvine clothing maker and retailer Billabong USA could have a bidding war on its hands as it seeks to buy Canada’s West 49.
Zumiez Inc., which is based near Seattle and operates a chain of clothing stores, said it is prepared to top Billabong’s $78 million late June offer for retailer West 49.
The company didn’t say what it might pay for West 49. Zumiez’s offer wouldn’t require financing and could be more appealing to shareholders of West 49.
Billabong’s offer was 136% more than what West 49 was valued at before the deal with announced.
Since then, the company’s market value has more than doubled to $82 million on the Toronto Stock Exchange, or about 5% higher than Billabong’s cash offer.
West 49, which is based south of Toronto, said a special committee of directors is set to determine if Zumiez can make an offer that’s better than Billabong’s.
Billabong would have the right to match any offer from Zumiez.
West 49 runs 138 Canadian stores, primarily in malls. The stores sell clothing inspired by skateboarding and snowboarding, including from Billabong.
Billabong, part of Australia’s Billabong International Ltd., makes clothes inspired by surfing, skateboarding and snowboarding.
The company is as much a retailer as a clothing maker with about 100 stores across North America. It has made several deals in recent years to add stores, which include shops under its own name as well as Beach Works and Honolua Surf Co.
The stores sell Billabong clothes and other brands.
In November, Billabong bought San Clemente’s Swell.com, an online clothes seller.
A bidding war with Zumiez could represent a potential clash between a store operator and a clothing maker expanding further into retail.
Zumiez is the second largest seller of what are known as action sports clothes, after Anaheim-based Pacific Sunwear of California Inc.
The chain has emerged as the industry’s up and comer as Pacific Sunwear continues to struggle with a long-running turnaround.
Billabong is the second largest maker of action sports clothes after Huntington Beach-based Quiksilver Inc.
Billabong USA makes up about 45% of its parent company’s $1.4 billion in yearly revenue.
